14 August 2017 - The financial incentive to take out private health insurance is fast diminishing for tens of thousands of Australians, as rising premiums and bracket creep make it cheaper to pay the Medicare Levy Surcharge than to ­invest in basic health cover.

Alongside the “carrot” of an insurance rebate, the Medicare Levy Surcharge has long acted as a “stick” to compel people to take out hospital cover rather than being slugged extra tax. Individuals earning $80,000 or more, and families on $180,000 or more, face being levied up to 1.5 per cent extra tax if they remain ­uninsured.

Since the measure was introduced by the Howard government, insurance has remained cheaper than the potential tax hit, but that equation is starting to change. Actuary Jamie Reid, the principal of Finity Consulting, yesterday said affordability had been undermined by rising premiums and the erosion of the ­rebate.

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